A 66-year-old man from Norfolk and a 70-year-old man from East Sussex were arrested on Wednesday morning, a Metropolitan Police spokesman confirmed.

The men were arrested under Operation Fernbridge, which began after Mr Watson claimed in October that “a senior aide of a former prime minister” was linked to a paedophile ring.

Mr Watson said during Prime Minister’s questions: “The evidence file used to convict paedophile Peter Righton, if it still exists, contains clear intelligence of a widespread paedophile ring.

“One of its members boasts of his links to a senior aide of a former prime minister, who says he could smuggle indecent images of children from abroad.”

Operation Fernbridge is focusing on allegations of child abuse at the Elm Guest House and the Grafton Close care home, both in Barnes, west London.

Commander Peter Spindler, the head of the Met’s specialist crime investigations, said: “This is a complex, multiagency investigation supported by the NSPCC, Ceop [Child Exploitation and Online Protection Centre] and Richmond social services involving non-recent allegations of sexual assault against children.”

Commander Spindler called on anyone with information to come forward.

“It is vital that anyone who has been affected by or has information about activity in the early 1980s at the Elm Guest House, or the Grafton Close care home, in Barnes speaks to the NSPCC on their Helpline on 0808 800 5000, or their local police,” he said.

A spokesman for Richmond council, which ran the care home, said: “Richmond council considers the safeguarding of all children and young people as an utmost priority and we take any allegations of abuse very seriously.

“As such we are offering our full support and co-operation to the police during their investigation. As the investigation is ongoing, it would be inappropriate to comment further at this time.”